Public borrowing hits 2011/12 target

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The public sector budget deficit was higher than expected in March, but downward revisions in previous months enabled the government to meet its full-year target, the Office for National Statistics said.

The Office for National Statistics said public sector net borrowing excluding financial sector interventions - the government's preferred measure - rose last month to £18.174bn from £17.951bn in March 2011.

Public sector net debt excluding financial sector interventions rose to £1.0225 trillion in March, equivalent to 66 per cent of GDP, the highest since records began in 1993.

The government aims to largely eliminate Britain's budget deficit, which was a record 11 per cent when it came to power in 2010, over the next five years.

So far, markets have given the Conservative-led government the benefit of the doubt and most analysts reckon it will achieve its aim of reducing its overall budget deficit to £120bn in the current 2012/13 year.

But that could change if the Eurozone situation takes a turn for the worse and Britain slides into a deep recession.

Official data on Wednesday is expected to show the economy skirted recession, recording growth of 0.1 per cent in the first three months of this year after shrinking by 0.3 per cent at the end of 2011.

In a sign that the austerity drive is starting to bear fruit, "Other current expenditure", which largely consists of departmental spending, fell in fiscal year 2011/12 for the first time since 1955.